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Home Tradesman Insights Changes to EPC rating cause construction sector boom

Changes to EPC rating cause construction sector boom

From 2025 domestic and commercial buildings will be required to meet new energy efficiency standards.

What’s Changing?

The U.K. government has proposed plans to restructure how Energy Performance Certificates (EPC) are calculated, which could leave property owners and landlords with worthless buildings.

The new rules, set to begin in 2025, will ban properties with an EPC rating lower than C from taking on new tenants. Current regulations state a property cannot be rented out if the energy rating is E or lower.

The changes are the latest effort to meet a net zero target by 2050, and will force millions of landlords and homeowners to improve their energy efficiency.

There are currently 13m homes in the UK that have an energy rating of D or lower, and many of these houses will need significant investment to bring them in line with targets.

When the new changes come into effect, fines for not complying will reach a maximum of £150,000, with a minimum of £5000 per breach.

Landlords are being advised to act now to meet the deadline, and to avoid their properties being left vacant.

Support for homeowners

The Green Homes Grant was set up by the government to offer financial support to property owners. The aim of this grant was to make buildings more energy efficient, however the number of people who took advantage of this scheme was low.

Applications for ‘green’ grants and vouchers were closed in March 2021, only six months after it was launched. The campaign, which cost millions of pounds, has been met with criticism; with commenters stating it was too complicated.

There are a number of other grants available for homeowners to help with the costs of improving energy ratings. However, this support is limited to low income households, and the help that’s available varies in different regions of the U.K.

Commercial Buildings

For commercial buildings there will be a number of exemptions when the new rules come in. These exemptions include:

  • Length of the lease – leases shorter than 6 months or longer than 99 years are exempt.
  • If the value of the building will be negatively impacted by more than 5% or it will take longer than 7 years to recoup the cost of the improvement measures, these buildings are exempt.
  • Consent – tenants must consent to the improvement measures required to increase the building’s energy efficiency.
  • Efforts made – if all improvement measures have already been made but the building can still not meet the target then it is exempt.

However, if the property is not exempt, the commercial building must meet an EPC rating of C by 2027, and a B rating by 2030. If they don’t, there will be fines and a lease won’t be granted.

Opportunities for tradespeople

If the money homeowners and landlords need to improve EPC ratings is the bad news, then the opportunities for tradespeople is the good news.

As we’ve mentioned before, demand in the construction sector is up 50%, and is set to continue. Skilled tradespeople will be needed to meet government targets, and as technology improves there will be more training opportunities.

If we multiply the average costs needed to improve EPC ratings, with the 13 million homes that have a below average energy performance, it’s clear to see there is money to be made.

Average costs to improve a domestic property’s energy rating.

The following are areas where demand is expected to rise:

  • Installing double or triple glazed windows
  • Draught-proofing existing windows and doors
  • Installing an energy-efficient boiler / heat pumps
  • Switching to a smart meter
  • Installing solar panels
  • Installing energy-efficient doors
  • Installing cavity wall and loft insulation
  • Insulating pipes and tanks
  • Renewable energy sources such as wood-fuelled heaters, solar panels or wind turbines

The type of work required does not stray too far away from what tradespeople have been doing for years. However, additional training maybe needed in some trades, such as for electricians and plumbers.

Tradesman Talk

Have you seen an increase in work to improve a building’s EPC rating? And if you have, what trade do you work in?

Do you expect the trend to invest in renewables to continue, and are the government targets realistic?

Have your say in the comments below, and if you found this blog useful, share it on social.

Until next time, make sure it’s Tradesman Saver.

Mark McPherson

Mark McPherson has an MA in Creative Writing and has been crafting content for over a decade. He writes for a range of niches, including the construction industry and insurance sector. Mark has worked internationally as a content writer and teacher.

All articles by Mark McPherson

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